April 29, 2019

In the U.S., the use of AI for adaptive learning programs in primary and secondary education raise concerns about screen time and data privacy. In China, however, it poses a cost-effective means to augment K-12 learning. Wei Zhou, founding managing partner of China Creation Ventures (CCV) recently shared his perspectives on AI-based online education with China Entrepreneur Magazine. Within the Chinese online education sector, Wei has invested in Singsound (English language learning), MiaoCode (learn to code software for high school students), DingDong Class (primary school English language learning), and, most recently in Kuaipeilian, a platform that teaches piano.

The Value Proposition of AI-Based Online Education

According to Wei’s perspective, which was reprinted in a press release, the primary driver of AI-based online learning is scalability and cost. The average price, for example, of a video conference lesson with a foreign English tutor is $22.50. To arrange this lesson for a student on a regular basis is prohibitively expensive for most Chinese families.

AI-delivered education, however, is far more affordable. With the recent emergence of its viability, Wei believes the technology has reached its 2.0 moment. As he describes in the release, “Education from the offline to the online is the 1.0 Era. Now the education will enter the era of 2.0 by leveraging AI, using the Internet to break the barriers of time and space, and solving the problem of resource limitation. We have seen the hope of using technology to solve supply and demand bottlenecks and cost bottlenecks.”

Wei and CCV have, furthermore, put their money where their mouth is. This month, CCV joined Kuaipeilian’s Series A. In December of last year, they led Dingdong Class’s Series A with $2.9 million. In September, CCV also lead MiaoCode’s $10 million Series A and led Singsound’s Series A in March 2018 for an undisclosed amount. (The above data is according to Crunchbase.)

Chinese Adoption of AI in Education Has Exploded–But Some Believe It May Falter

Wei is not alone in his enthusiasm for AI-based online learning. Numerous massive funding rounds and successful IPOs went in favor of Chinese edtech companies in 2018. VIPKid took in $500 million in Series D+, in part, to develop an AI alternative to their videoconferencing tutors. Liulishuo, another English language instructor app, raised $71.9 million with their IPO.

According to the South China Morning Post, Chinese investments accounted for over half of the global expenditures on AI in 2018.

There are, however, indications that this development may be running into some roadblocks in the near term. As the Financial Times reported on April 24, private equity investment in Chinese tech is way down so far in 2019. So far this year, investors have spent $6.3 billion in Chinese tech. That’s down from $16.3 billion during the same period in 2018.

The dearth might signify more of a healthy correction than a well going dry. As Wei told the Financial Times, over the past three years, “the market was really crazy, with bubbles everywhere.”

In any event, Chinese AI-based education is not going away. While initiatives around the world continue to push the ball forward, Chinese learners remain far and away the most enthusiastic adopters.